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There were few surprises at the Microsoft Windows 2003 Server launch held in San Francisco today, as a svelte Steve Ballmer walked the crowd through the bells and whistles in his company's latest operating system.

Ballmer gave the standard pitch for a new version of a Windows server product, touting its reliability, new features, low cost and leading performance on high end servers, during his keynote speech. A large number of Microsoft workers had turned up for the launch, hooting and hollering after every on-stage demo.

In total, the event was a sobering affair.

The Bill Graham Civic Auditorium is one of San Francisco's many first rate music venues and on a good day, you can find dancing, drugged up hippies. Microsoft's presence at the concert hall seemed unnatural.

To be sure, the booming Ballmer did his part to test out the audio system, mixing celebratory calls with fist pumps and short outbursts of enthusiasm.

"This is the most significant piece of work we have ever done in terms of what it means for the IT professional and the data center," he said.

Ballmer called Intel's President and COO Paul Otellini on to the stage to help espouse the importance of this new code. The executives showed off a 64 processor HP SuperDome server with Intel's upcoming Madison chips inside. The system set a record for the highest single system transaction processing performance using Windows Server 2003 and SQL Server 2000, Enterprise Edition for 64bit chips.

Ballmer told Otellini that there has "never been a better example of doing more with less" than Itanium. But we think he meant that as a compliment.

The Wintel brass also pointed out a cluster of Itanium 2 systems from Dell that appeared to be made up of eight 1U systems. Dell has yet to announce the name or shipping date for its Itanium 2 server.

Ballmer, of course, made his plea to users to trust Microsoft's security technology with this OS release.

"It's tattooed on our brains," he said. "We have gotten the message from our customers loud and clear that security is a top issue."

Statements such as that should cause a few alarms to go off in any CIO's head. Microsoft, like any IT vendor, knows that customers place security high up on their list of concerns. Still, the company has taken ages to start shipping something resembling secure code.

In a similar vein, users have looked for Microsoft to make a real move in the data center for some time. The company takes repeated shots at Unix operating systems but has little to show for the claims.

Some new clustering features, improved performance and better patching procedures will not automatically open doors for Microsoft in the data center anytime soon. Solaris, AIX and HP-UX all outpace Windows by several years in their functionality and some of this work eventually trickles down to Linux as well.

Incidentally, Ballmer mentioned on two occasions that Microsoft is going after Solaris and AIX customers. The glaring omission of HP-UX in these verbal attacks shows that Microsoft is willing to humble itself before HP to prove the strength of their partnership.

To its credit, the Microsoft storage software team has improved Windows with some SAN (storage area network) management tools and data recovery software.

All in all, Microsoft is improving its OS to the point where it has started to resemble something the Unix crowd had two or three years ago. This should be more than enough effort to keep Windows users happy and maybe tempt a few Linux/Unix users to convert.

Microsoft's own staff is clearly excited by the new OS.

"We're seeing crazy uptime numbers now, like three months, six months. I fully expect we'll see a year of uptime when Windows Server 2003 is finished," said Jeff Stucky, senior systems engineer on the Microsoft.com operations team on this Microsoft page .